Vegas Style in Macau Bolsters Melco: China Overnight
- 2nd December 2013
Crown Entertainment Casinos
Crown Entertainment Ltd. (MPEL), the Macau casino
venture of entrepreneur Lawrence Ho and billionaire
James Packer, jumped for a fifth month on prospects
its version of the Las Vegas Strip in Cotai will boost
of Hong Kong-based Melco Crown rallied 7.3 percent
to $35.59 in November, boosting their rally to 111
percent this year. The Bloomberg China-US Equity Index
of the most-traded Chinese stocks in New York jumped
5.6 percent to 108.23, capping the longest rally since
2009 as the iShares China Large-Cap ETF, the nations
largest exchange-traded fund in the U.S., climbed
6.8 percent to $40.13.
is building a casino resort in an island off the Macau
peninsula known as Cotai that will mirror the Las
Vegas Strip. The company said its looking for
mass gamblers after third-quarter earnings
missed estimates as high-stakes bettors spent less.
Profit forecasts for the next four quarters rose 45
percent from a year ago, compared with 23 percent
for Las Vegas Sands Corp., the worlds biggest
casino operator, according to Bloomberg Industries
been a shift in play from the peninsula, where the
older casinos are, to Cotai, where Melco Crown is
a major player, Bryan Maher, an analyst at Craig-Hallum
Capital Group LP in New York, said in a phone interview
on Nov. 25. Macau is the center of the gaming
universe and Melco has 100 percent of profit
coming from there, he said.
is not alone in investing in Cotai for its growth.
It will debut its second casino on the strip in 2015
alongside Las Vegas Sands and Hong Kong-based Galaxy
Entertainment Group Ltd., while MGM Resorts International
and Wynn Resorts Ltd. plan to open new locations there
in 2016, according to data collected by Bloomberg
You have roughly $17 billion in investments
going into the ground right now in Cotai where all
of the major players have new projects under way,
Maher said. They are all gearing up for this
influx of affluent middle-class Chinese visitation
coming to that area.
last month vowed to allow more private investment
in the state sector, loosen its one-child policy and
better protect farmers rights in the most sweeping
reforms in two decades. The government also pledged
to elevate the role of markets in the worlds
you do have a middle class that is growing pretty
rapidly, thats all good news to the Macau market,
John Kempf, a New York-based analyst at RBC Capital
Markets LLC, said in a phone interview on Nov. 26.
If the measures are successful, more income will be
transferred to average household, according to Qinwei
Wang, a London-based economist at Capital Economics
means that consumer spending will be much stronger
in the future, Wang said by phone on Nov. 27.
Crown is increasing focus on premium mass gamblers
who are more profitable than VIP clients brought in
by junket operators, and is making significant
progress on its Studio City resort in Cotai,
Co-Chairman Ho said in the earnings statement on Nov.
5. VIPs account for about two-thirds of the casino
revenue that flows into Macau, the worlds largest
company is expanding overseas in the face of land
and labor constraints in Macau. Melco Crown has partnered
with Belle Corp. to develop and operate a casino resort
in Manila thats expected to cost more than $1
billion. Belle holds one of four casino licenses in
Interactive Group Inc., which develops online games,
surged 27 percent to $11.23, the most since 2008.
A consortium led by its Chairman Yuzhu Shi and Baring
Private Equity Asia offered to purchase the company
on Nov. 25.
Holding Co. dropped 23 percent to $7.10, the biggest
drop since August. Fourth-quarter revenue will rise
to between $75 million and $77 million, Beijing-based
LightInTheBox said in a statement Nov. 19. That was
below the $83.1 million mean estimate of four analysts
compiled by Bloomberg.
Hang Seng China Enterprises Index in Hong Kong gained
7.7 percent this month to 11,441.27, the biggest gain
for the index this year. The Shanghai Composite Index
of domestic shares advanced 3.7 percent to 2,220.50.